A shopping cart full of Foreign Guns and Fighter Jets

Despite the impetus to ‘Make in India’, the country continues to be dependent on imports to modernise its military as big-ticket deals show.

Though the Union government has been pushing the “Make in India” programme and bringing in new guidelines to simplify defence procurements and promote domestic manufacturing, India continued to be dependent on imports to modernise its military. Several big-ticket deals this year have shown that India will continue to depend on imports for major platforms, and government-to-government deals with foreign companies have emerged as the preferred route.

A major change on the fiscal side this year is that the Defence Ministry will utilise its full budgetary allocation for capital procurements. “The Finance Ministry has not asked for any money to be returned,” officials said. This will definitely cheer the Ministry as it has to make initial payments for the deals recently signed.

In September, the government signed the Inter-Governmental Agreement (IGA) with France for 36 Rafale fighter jets at a cost of €7.87 billion. In doing so, the government has brought closure to the original Medium Multi-Role Combat Aircraft (MMRCA) contest, which began in 2007, for 126 jets under which Rafale was originally shortlisted.

Decks are now cleared for adopting the same method in a new avatar to select a fighter jet to be built in India with significant technology transfer.

In October, India and Russia concluded IGAs for five S-400 Triumf air defence systems and four stealth frigates and signed a stakeholder agreement for Kamov-226T utility helicopters, together worth over $10 billion. The final contracts are yet to be signed. On November 30, the Defence Ministry signed the Letter of Acceptance (LoA) for 145 M777 ultra-light howitzers in a deal worth $737million.

All these deals are between governments and have offset clauses under which the companies are contract- bound to invest in India to source components. “An IGA is convenient as it is between sovereign governments and there is no room for controversy. They also save time,” one official said.

Missing Guidelines ::

On the other hand, the Defence Ministry has brought in the new Defence Procurement Procedure, 2016, which came into effect in April. It aims to give impetus to the private sector and promote domestic manufacturing.

However, a key chapter in the DPP on forming strategic partnerships in critical sectors is yet to be finalised. Hence big-ticket tenders have been held up.

For instance, the tender for six submarines under Project 75I to be built locally with technology transfer and worth over ₹50,000 crore is awaiting policy clarity on strategic partnerships. Similar is the case with the new fighter aircraft deal, officials told The Hindu.

Submarine and fighter aircraft are some of the designated platforms for collaboration under the strategic partnership model.

Successful test ::

On the domestic front, the Defence Research and Development Organisation successfully tested an indigenously developed 155-mm 52-calibre howitzer called the Advanced Towed Artillery Gun System (ATAGS) recently. It was developed in partnership with Bharat Forge, Tata Power and the Ordinance Factory Board.

If the gun passes all user trials and is inducted into the Army, it will be a major boost to indigenous manufacturing.

The Army has a requirement for thousands of artillery guns to replace its older variants.

While this is the case with major platforms, the armed forces continue to struggle for small but critical requirements. Repeated attempts by the Army to procure a basic rifle for its soldier remain a mirage.

Deals for carbines, assault rifles, sniper rifles and Light Machine Guns (LMG) have all been cancelled recently and are being re-initiated.